What it takes to be in the top 1% of Texas

(NEXSTAR) – Ever wonder what it takes to be rich in Texas? What about the ultra-rich?

An analysis published earlier this year by SmartAsset showed how much income it takes to be in the top 1% in each of the 50 states.

Using tax data from the IRS, the site was able to determine the minimum income needed to be among the top earners in each state. These figures were then adjusted to $2,021 using the Consumer Price Index for Urban Wage Workers and Clerks (CPI-W) from the Bureau of Labor Statistics.

In Texas, you’ll need an adjusted gross income of at least $594,000 to be in the top 1% of earners in the state.

This is not far from the national average. In its analysis, SmartAsset found that an American family needs a gross income of $597,815 to fall into the top 1 percent of earners nationally. Those in the top 1% in the US earn twice as much as those in the top 5% – a gross income of $240,712 is enough to put you in the top 5%.

Adjusted gross income, or AGI, is your gross income minus some general adjustments—such as student loan interest or teacher supply costs—to income, according to the IRS. Gross income includes wages, capital gains, retirement distributions and any other income. Adjustments can include student loan interest, alimony payments, or contributions to a retirement account.

Your AGI is used to determine which credits and deductibles for which you qualify while filing taxes.

The figure to be considered one of the top earners varies by location. The number is highest in Washington, DC, where you need to make at least $918,000 to be in the top 1%.

Here are the five states with the highest adjusted gross incomes that should be considered among the top 1%:

  1. Connecticut: $896,490
  2. Massachusetts: $810,256
  3. New York: $777,126
  4. New Jersey: $760,462
  5. California: $745,314

Alternatively, the five states with the lowest AGI for the top 1% are:

  1. West Virginia: $350,212
  2. Mississippi: $361,462
  3. New Mexico: $384,427
  4. Arkansas: $411,633
  5. Kentucky: $412,836

Because SmartAsset’s calculations are based on consumer price data from 2021, the income needed to be in the top 1% of the state is likely even higher now thanks to inflation.

US inflation rose 8.2% in September from a year earlier.

Leave a Reply

Your email address will not be published. Required fields are marked *